Market Roundup
- Trump says China trade talks 'back on track,' new tariffs on hold
- China Jun NBS Manufacturing PMI, 49.4, 49.5 f'cast, 49.4 prev
- China Jun Caixin Mfg PMI Final, 49.4, 50.0 f'cast, 50.2 prev
- N.Korea upbeat on Trump-Kim surprise meeting as a chance to push nuclear talks
- PM contender Hunt sets out plans to prepare Britain for no-deal Brexit
- UK Brexit negotiator Robbins to leave role - The Sunday Times
- Brexit and global slowdown hit UK factories in Q2 - BCC
- OPEC set for oil cut extension if Iran endorses pact
- Japan Q2 Tankan Big manufacturers' sentiment index, 7, 9 f'cast, 12 prev
- Japan Q2 Tankan Non-manufacturers' index, 23, 20 f'cast, 21 prev
- Japan Jun Nikkei Mfg PMI, 49.3, 49.5 prev
Economic Data Ahead
- (0345 ET/0745 GMT) Italy Jun Markit/IHS Mfg PMI, 48.8 f'cast, 49.7 prev
- (0350 ET/0750 GMT) France Jun Markit Mfg PMI, 52.0 f'cast, 52.0 prev
- (0355 ET/0755 GMT) Germany Jun Markit/BME Mfg PMI, 45.4 f'cast, 45.4 prev
- (0355 ET/0755 GMT) Germay Jun Unemployment Chg SA, -3k f'cast, 60k prev
- (0355 ET/0755 GMT) Germany Jun Unemployment Rate SA, 5.0% f'cast, 5.0% prev
- (0400 ET/0800 GMT) Italy May Unemployment Rate, 10.3% f'cast, 10.2% prev
- (0400 ET/0800 GMT) EZ May Money-M3 Annual Grwth, 4.6% f'cast, 4.7% prev
- (0400 ET/0800 GMT) EZ Jun Markit Mfg Final PMI, 47.8 f'cast, 47.8 prev
- (0430 ET/0830 GMT) UK May BOE Consumer Credit, 0.967 bln f'cast, 0.942 bln prev
- (0430 ET/0830 GMT) UK May Mortgage Lending (GBP), 4.100 bln f'cast, 4.290 bln prev
- (0430 ET/0830 GMT) UK May Mortgage Approvals, 65.600k f'cast, 66.261k prev
- (0430 ET/0830 GMT) UK Jun Markit/CIPS Mfg PMI, 49.2 f'cast, 49.4 prev
- (0500 ET/0900 GMT) EZ May Unemployment Rate, 7.6% f'cast, 7.6% prev
Key Events Ahead
- N/A Fed's Richard Clarida, ECB's Philip Lane, People's Bank of China's Yi Gang and ECB rate setters Klas Knot, Olli Rehn and Hernandez de Cos speak in Helsinki
- (0245 ET/0645 GMT) Opening speech of ECB vice president Luis de Guindos at the 13th ECB Central Banking Seminar "Monetary policy in the euro area" in Frankfurt, Germany
- (1700 ET/2100 GMT) Reserve Bank of New Zealand Assistant Governor Geoff Bascand delivers a speech entitled "macroprudential policy: past, present and future" in Wellington
FX Beat
DXY: The dollar index rallied to a 1-week peak as U.S. Treasury yields rose after comments last week from Federal Reserve officials, including Chair Jerome Powell, cooled expectations for aggressive rate cuts. The greenback against a basket of currencies traded 0.4 percent up at 96.53, having touched a low of 95.84 on Tuesday, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at -13.69 (Neutral) by 0500 GMT.
EUR/USD: The euro plunged to a 1-week low, as the greenback surged after the U.S. Treasury 10-year yield rose 3.5 basis points at 2.031 percent, putting some distance between a 2-1/2-year low of 1.974 percent recorded on June 20. The European currency traded 0.4 percent down at 1.1323, having touched a high of 1.1412 on Tuesday, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at -87.57 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, EZ Markit manufacturing PMI, unemployment rate and ECB De Guindos and Lane's speech, ahead of the U.S. construction spending and manufacturing PMI from both Markit and ISM. Immediate resistance is located at 1.1437 (Mar. 21 High), a break above targets 1.1474 (Dec. 21 High). On the downside, support is seen at 1.1290 (June 10 Low), a break below could drag it below 1.1251 (June 7 Low).
USD/JPY: The dollar rallied to a 1-1/2 week peak as risk sentiment improved after U.S. President Donald Trump at the end of the meeting with Chinese President Xi Jinping in Japan stated that he would hold back on tariffs and that China will buy more farm products. The pair was trading 0.4 percent up at 108.30, having hit a low of 106.78 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -69.96 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. construction spending and manufacturing PMI from both Markit and ISM. Immediate resistance is located at 108.80 (June 11 High), a break above targets 109.08 (Jan. 8 Low). On the downside, support is seen at 107.81 (Jun. 5 Low), a break below could take it lower at 107.24 (June 24 Low).
GBP/USD: Sterling declined below the 1.2700 handle, after Boris Johnson, the frontrunner of the Conservative party leadership contest, stated that Britain will leave the European Union on October 31 with a deal or without a deal. The major traded 0.1 percent down at 1.2682, having hit a high of 1.2783 on Tuesday, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at 49.28 (Neutral) 0500 GMT. Investors’ attention will remain on the UK Markit manufacturing PMI, consumer credit and M4 money supply, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2743 (June 5 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2642 (Jun. 21 Low), a break below targets 1.2611 (May 29 Low). Against the euro, the pound was trading 0.2 percent up at 89.30 pence, having hit a low of 89.92 on Friday, it’s lowest since Jan. 11.
AUD/USD: The Australian dollar plunged as the Reserve Bank of Australia is seen all but certain to slash its cash rate again at its July 2 board meeting to a new all-time low of 1.00 percent. Moreover, the selling pressure around the major intensified after data showed China's factory activity unexpectedly shrank in June as domestic and export demand faltered. The Aussie trades 0.4 percent down at 0.6993, having hit a high of 0.7034 earlier, it’s highest since Jun. 7. FxWirePro's Hourly Aussie Strength Index stood at 100.92 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6964 (June 7 Low), a break below targets 0.6925 (June 12 Low). On the upside, resistance is located at 0.7069 (Apr. 30 High), a break above could take it near 0.7097 (Mar. 13 High).
NZD/USD: The New Zealand dollar slumped, halting a 10-day rally on news that New Zealand's central bank proposal to raise capital ratio requirements for banks would impact the agricultural sector and small businesses the most due to rising borrowing costs. The Kiwi trades 0.3 percent down at 0.6697, having touched a high of 0.6726 earlier, its highest level April 18. FxWirePro's Hourly Kiwi Strength Index was at 133.40 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6771 (Apr. 11 High), a break above could take it near 0.6799 (Apr. 4 High). On the downside, support is seen at 0.6671 (5-DMA), a break below could drag it below 0.6654 (Apr. 30 Low).
Equities Recap
Asian shares rallied as the United States and China agreed to restart trade talks after President Donald Trump offered concessions to his Chinese counterpart Xi Jinping over the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan gained.
Tokyo's Nikkei rallied 2.1 percent to 21,729.97 points, Australia's S&P/ASX 200 index gained 0.5 percent to 6,648.10 points and South Korea's KOSPI surged 0.1 percent to 2,132.48 points.
Shanghai composite index rose 2.05 percent to 3,038.83 points, while CSI 300 index traded 2.7 percent up at 3,928.03 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 28,542.62 points. Taiwan shares added 1.5 percent to 10,895.46 points.
Commodities Recap
Crude oil prices surged more than 3 percent after Saudi Arabia, Russia, Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting this week. International benchmark Brent crude was trading 3.01 percent higher at $66.32 per barrel by 0511 GMT, having hit a high of $66.83 on Wednesday, its highest since May 30. U.S. West Texas Intermediate was trading 3.01 percent up at $59.88 a barrel, after rising as high as $60.06 earlier, its highest since the May 23.
Gold prices declined more than 1 percent to hit their lowest in a week, as a stronger dollar and hopes of a trade deal between the United States and China improved risk appetite. Spot gold was trading 1.4 percent down at $1,390.45 per ounce by 0514 GMT, having touched a high of $1,439.14 on Tuesday, its highest since May 14, 2013. U.S. gold futures slipped 1.1 percent to $1,398.50 an ounce.
Treasuries Recap
The Japanese government bond prices fell, with the five-year JGB yield rising 1 basis point to minus 0.250 percent and the 10-year yield climbing 1.5 basis points to minus 0.150 percent. The 30-year yield was 2 basis points higher at 0.375 percent.
The Australian government bond futures slipped, with the 3-year bond and the 10-year contracts, off 1.5 ticks at 99.065 and 99.66 respectively.
The New Zealand government bonds eased slightly, sending yields about 2-3 basis points higher across the curve.
